Out of the starting blocks

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Out of the starting blocks

Chris Madsen, CEO Aegon Blue Square Re writing for B3i

While (re)insurance has made great strides in process improvements over the past decades, many processes remain largely manual, frustrating and costing members of the insurance value chain. Now, imagine a world where data flows easily where it is supposed to go, and it does so in a controlled and secure manner, setting the stage for increasingly automated transactions and processing. Further, consider that truly digitalising a process allows it to follow Moore’s Law[1] and thus improve exponentially in terms of processing time and capabilities. Setting the stage for this is therefore a valuable and sustainable endeavour that could benefit insurance value chain members for years and decades to come.

With this in mind, how exciting to see the Blockchain insurance industry initiative, B3i, incorporated earlier this week culminating 18 months of hard work with lots of accomplishments and lessons learned for all involved.

Looking back, getting 15 member companies signed up to a Memorandum of Understanding by early 2017 was a significant accomplishment driven by the B3i management team with support from many of us member companies. Developing and demonstrating a working prototype on Hyperledger Fabric with over 100 nodes and having another 23 companies join the testing and validation efforts was another key milestone. Getting the company formally set up with the management team appointed, governance established, and funding plans developed is yet another.

What has been amazing for me to observe in particular is the willingness of different companies to come together to explore new ways of transacting (re)insurance. An initiative such as this has many opportunities to fall over, but we always come back to the goal of improving how transactions are done. Though discussions can be heated and passionate, we share a common vision: that we can do better and that society can ultimately benefit from this. Everyone, from consumer to insurer to reinsurer as well as brokers can in the future work more efficiently and transparently once we make this work.  Starting with reinsurance makes a lot of sense. Since reinsurance is B2B, it naturally limits the scale of the problem that needs to be solved. Any B2C solution would need to solve at least the challenges we are currently addressing as well as additional ones. So, B2B is a stepping stone that is also a significant business case in its own right.

It is also important to stress that the spirit of B3i is inclusive. Clearly in any effort, some members are early adopters while others wait. Some want to fund the initiative, while others prefer to use an initiative after it has been launched. B3i is open to all companies and industry associations. One does not need to be a shareholder to use the system or to give input. Clearly, shareholders will set the ultimate direction of the company based on user feedback, but all users of the system use the system on the same terms.

Looking ahead for B3i, 2018 will be about funding of course, but even more than that, it will be about product and marketing. For B3i Services AG, when we look back at 2018, we will undoubtedly have many more lessons learned and hurdles cleared, but the test of whether it has been a successful year, in my opinion, will be around product development and commercial launch and sharing the open message globally.

This is my challenge to the management team, to myself and to you as a reader of this. This will not happen in isolation, so if any of this sounds interesting, please provide feedback – good or bad – and explore how you can become more engaged. 

Please send your comments to me at chris.madsen@aegon.com 

Chris Madsen

 

[1] Moore's law is the observation that the number of transistors in a dense integrated circuit doubles approximately every two years. The observation is named after Gordon Moore, the co-founder of Fairchild Semiconductor and Intel, whose 1965 paper described a doubling every year in the number of components per integrated circuit.

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